The short answer: Good retirement planning comes down to four steps: estimate what you will spend, count the income you will already have, save the gap in tax-advantaged accounts, and invest it in a diversified mix that gets more conservative as you near retirement. For 2026 you can put up to $24,500 in a 401(k) and $7,500 in an IRA, with extra catch-up room after age 50.
How much money do you need to retire?
Start with spending, not a magic number. Many planners estimate retirement spending at roughly 70% to 85% of pre-retirement income, since commuting, payroll taxes and retirement saving usually stop. Health care often costs more.
A common rule of thumb for turning savings into income is the 4% guideline. It suggests you can withdraw about 4% of your savings in the first year, then adjust for inflation, with a reasonable chance the money lasts about 30 years. In practice:
- $500,000 saved supports about $20,000 a year in first-year withdrawals.
- $1,000,000 saved supports about $40,000 a year.
It is a planning shortcut, not a guarantee. Market returns, inflation and how long you live all change the answer.
What income will you already have?
Subtract guaranteed income from your spending target to see how much your savings must cover.
- Social Security: you can claim as early as 62. Full retirement age is 67 for anyone born in 1960 or later. Each year you delay past full retirement age, up to 70, raises your benefit by 8%.
- Pensions: check whether yours has a survivor option and cost-of-living adjustments.
- Part-time work, rental income or annuities: any steady income lowers what your portfolio must provide.
You can see your own estimate by creating an account at ssa.gov/myaccount.
Which retirement accounts should you use?
Tax-advantaged accounts let your savings grow without yearly taxes. Here are the 2026 limits from the IRS.
| Account | 2026 limit | Catch-up | Tax treatment |
|---|---|---|---|
| 401(k), 403(b), most 457 plans, TSP | $24,500 | $8,000 at 50+; $11,250 at ages 60 to 63 | Pre-tax or Roth, depending on plan |
| Traditional IRA | $7,500 | $1,100 at 50+ | May be deductible; taxed on withdrawal |
| Roth IRA | $7,500 (shared with traditional) | $1,100 at 50+ | No deduction; qualified withdrawals tax-free |
| Self-directed IRA (including gold IRAs) | Same IRA limits | Same | Traditional or Roth rules apply |
Roth IRA contributions phase out between $153,000 and $168,000 of income for single filers and $242,000 to $252,000 for married couples filing jointly in 2026.
A practical order many people follow:
- Contribute enough to your 401(k) to get the full employer match. It is an instant return.
- Fund an IRA, often a Roth if you qualify.
- Go back and raise your 401(k) contributions toward the limit.
- Invest any extra in a regular taxable brokerage account.
How should you invest for retirement?
Most retirement money does best in a low-cost, diversified mix. The share in stocks usually falls as retirement gets closer, because there is less time to recover from a downturn. Our portfolio diversification guide shows example mixes by age.
Key habits that matter more than picking winners:
- Keep fees low. A 1% yearly fee can consume a large share of growth over 30 years.
- Automate contributions so saving happens before you can spend it.
- Rebalance yearly to keep your risk where you set it.
- Keep one to two years of spending in cash or short-term bonds once retired, so you are not forced to sell in a downturn.
Where does gold fit in retirement planning?
Some savers hold a small portion of retirement money in physical gold or silver as a hedge against inflation and market stress. Inside a retirement account, that is done through a self-directed gold IRA, usually funded by rolling over part of an old 401(k) or IRA.
Weigh the trade-offs honestly:
- Gold pays no interest or dividends, so it does not produce income.
- Gold IRAs carry setup, custodian and storage fees, plus dealer markups.
- Gold prices can fall or stay flat for long periods.
For most people, gold is a supporting position, not the core of the plan.
What changes once you retire?
- Required minimum distributions from traditional IRAs and 401(k)s begin at age 73, rising to 75 for people born in 1960 or later. Roth IRAs have no RMDs for the original owner.
- Medicare eligibility starts at 65. Enroll on time to avoid late penalties.
- Withdrawal order matters for taxes. Many retirees draw from taxable accounts first, then tax-deferred, then Roth, but the best order depends on your tax bracket.
Frequently asked questions
How much should I save for retirement each year?
A common target is 15% of gross income, including any employer match, starting in your 20s or 30s. Starting later usually means saving a higher percentage.
What are the 2026 401(k) and IRA limits?
For 2026 the 401(k) limit is $24,500, with an $8,000 catch-up at 50 or older and $11,250 at ages 60 to 63. The IRA limit is $7,500, plus a $1,100 catch-up at 50 or older.
What is the 4% rule?
It is a rule of thumb that you can withdraw about 4% of your savings in the first year of retirement and adjust for inflation afterward, with a reasonable chance the money lasts around 30 years. It is not a guarantee.
When should I claim Social Security?
You can claim at 62, but benefits are reduced. Waiting past full retirement age, which is 67 for people born in 1960 or later, raises your benefit by 8% a year until 70.
Should I put my retirement savings in gold?
Gold can be a small diversifying holding, but it pays no income and can fall in price. Most planners suggest keeping it to a modest share rather than moving all your savings.
At what age do required minimum distributions start?
RMDs from traditional IRAs and 401(k)s start at 73, rising to 75 for people born in 1960 or later. Roth IRAs have no RMDs for the original owner.
Sources: IRS 2026 contribution limits, Social Security Administration. Related: Investing when retirement is still years away. This article is general education, not financial advice.